In The News › La. rebuilding plan is under attack

Apr 14, 2008

Source: Times-Picayune

La. rebuilding plan is under attack

La. rebuilding plan is under attack
Who gets what is one sticking point
Friday, April 14, 2006
By Laura Maggi
Capital bureau

BATON ROUGE — Gov. Kathleen Blanco’s $7.5 billion plan to help homeowners rebuild hurricane-damaged houses is drawing fire from both ends of the political spectrum, and there are questions about whether there has been ample opportunity for public input into the proposal.

Leaders of Blanco’s Louisiana Recovery Authority have said that they want the proposed housing recovery plan, dubbed “The Road Home,” to be approved by the Legislature by the end of the month. However, a resolution unanimously adopted Thursday by the House made clear that lawmakers have substantive problems with the plan, including provisions that would require that any insurance proceeds be deducted from the damage estimates used to calculate a homeowner’s grant.

The proposal was unveiled in late February, although some details have been altered since then. But state officials are now in a time crunch for getting all the necessary approvals for the plan, trying to get backing for the blueprint while they hire a contractor to administer the program and seek additional financing from Congress.

State officials Thursday were able to win last-minute House approval of Senate Concurrent Resolution 19, which gives needed legislative backing to the authority’s broad outline for how to spend $6.2 billion that was approved for Louisiana by Congress late last year. That proposal had to be sent to the U.S. Department of Housing and Urban Development by today.

Comments from public

Congress is considering a supplemental budget request from President Bush to give Louisiana an additional $4.2 billion to deal with the state’s housing problems, an amount that congressional members say could be approved by late May.

“The bulk of the comments from most members of the Legislature — and most public officials — is to speed up, not slow down, the process,” said Andy Kopplin, the executive director of the Recovery Authority. The housing proposal is in a 10-day comment period, which ends Monday, that allows the public to offer criticisms of the proposal.

But several members of the Legislature, along with U.S. Rep. Richard Baker, R-Baton Rouge, have said more time is needed to make sure the proposal adequately deals with the state’s housing crisis caused by Hurricanes Katrina and Rita.

“The public has to have input in this,” said Rep. Cedric Richmond, D-New Orleans, chairman of the Legislative Black Caucus, which is holding a meeting on the proposal on Monday in the state Capitol from 2 until 5 p.m. “This is a good shell, but the devil is in the details.”

The authority’s plan would provide as much as $150,000 per owner-occupied house to repair damage, rebuild at the same location, or sell the house to the state. But in a provision that is directly criticized in House Resolution 32, any insurance payments or FEMA awards would be deducted from the $150,000.

The resolution also is critical of a penalty provision that would reduce by 30 percent the grant for a homeowner inside the flood plain who did not carry flood insurance, as well as income restrictions that would be applied to the program if not enough money is available.

Spread money thinner

Rep. Peppi Bruneau, R-New Orleans, said it doesn’t make sense to reduce a family’s grant because they paid for flood insurance, especially because the flood waters that inundated the city were from engineering failures from the federally designed levees.

Eliminating the insurance deduction or the penalty for not carrying insurance would make the program more expensive, Kopplin said.

But Bruneau said that he would prefer that the grant amounts per household be reduced instead of factoring in homeowners’ insurance status.

The Bureau of Governmental Research in New Orleans has issued its own criticisms, in particular targeting a provision that restricts the grants to certain homeowners if additional federal dollars are not made available.

A partially financed plan calls for limiting benefits to homeowners outside the flood plain whose houses took water, and to lower-income households inside the flood plain. The income restriction would limit the proposal to those who earn 70 percent of the median household income or less, which in New Orleans would mean a family with a maximum household income of $36,610.

The BGR report said that any plan to rebuild damaged houses would need to include the middle class, who are the backbone of economic recovery.

The non-profit research group said that if the state must implement a smaller plan, the maximum benefit should be lowered instead of means-testing the grant awards.

Baker said the state should consider modifying its housing proposal to include more elements from his federal legislation, which was widely touted by state officials in the months following the storms. That plan was derailed in January, when the White House announced it would not endorse the concept of federal buyouts. Instead, the Bush administration negotiated with the Recovery Authority and Blanco’s office to come up with the additional $4.2 billion in block grants that could be used in a state housing proposal.

Parts of Baker plan

The state could consider embracing a component of Baker’s plan that allowed a central state entity to offer buyouts to homeowners and then bundle the purchased property to sell to developers. The money that is raised by the state could be used to “fill in” low-lying tracts of land, Baker said, which would lower the necessary elevations homeowners will have to undertake.

But Sean Reilly, a member of the Recovery Authority, said that the group’s philosophy is to let a local redevelopment authority decide how to deal with land that is assembled through buyouts.

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Laura Maggi can be reached at lmaggi@timespicayune.com or at (225) 342-5590.

Apr 14, 2008

Source: Times-Picayune

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